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What the Chinese were doing was using their money to create a safe bubble wrapped around the United States that would stabilise the system and so keep China safe. But in the process the Chinese money would create the biggest consumer and property boom ever in history. And lead America into a protected dreamworld that was increasingly detached from the reality outside. Adam Curtis, Can’t Get You Out of My Head V: The Lordly Ones *****
Since Putin had come to power the global price of oil had increased drastically. And money had poured into Russia … ibid.
In the UK one of the most well-known cases was that of Barlow Clowes. Between October 1983 and May 1988 about 11,000, mainly elderly, small investors entrusted their money to Barlow Clowes International, the vast majority of whom were persuaded to do so by misrepresentation that their funds would be securely invested in gilts (government bonds). In fact, very little, if any, of that money was invested in gilts. Investors’ moneys were stolen and used to buy houses, farms, yachts, cars, antique furniture, a vineyard and shares in private and public companies. In 1992, after a trial lasting 112 days Peter Clowes got 10 years in prison. This case is still relevant in that it was only in 2011 (7 February 2011) that the case was finally declared closed when HM Treasury announced it had finally recovered £125 million of the £150 million defrauded from investors. John Lea, A Brief Introduction to Corporate Crime
‘We must lend Germany DM90 million. It may never be repaid but it will be less of a loss than the fall of Nazism.’ Everything is a Rich Man’s Trick, Montagu Norman, Bank of England, 2014
The investment didn’t come from Hitler: it came from Brown Brothers Harriman … These Nazis raised money from America’s richest families. ibid.
I G Farben who had entered into a cartel with the Rockefeller’s Standard Oil ... The Nazi war machine was actually an American business … a highly lucrative business. ibid.
This railway line [to Auschwitz] was an American railway line. ibid.
Nobody said a word about American industrialists building Hitler’s war machine at the Nuremberg trials. ibid.
Successful investing is anticipating the anticipations of others. John Maynard Keynes, cited Gregory Bergman, Isms, 2006
The first rule of business: protect your investment. Etiquette of the Bankers, 1775
In our time we’ve witnessed the zenith of global finance. In 2006 the world’s total economic output was worth around $47 trillion. The total value of stock and bond markets was roughly $119 trillion. More than twice the size. And the amount outstanding of the strange new financial life-form known as derivatives was $473 trillion. Ten times larger ... This is the story of financial globalisation. Professor Niall Ferguson, Ascent of Money: Chimerica, Channel 4 2010
According to [George] Soros’s Theory of Reflexivity, financial markets can’t possibly be perfectly efficient much less rational ... His biggest coups came from being right about losers not winners. And the greatest of these was among the most momentous speculative hits in all of financial history. On September 16th 1992 with the British £ in big trouble I watched as Soros put out a contract on the Bank of England ... So sure was he that the £ would drop that he bet $10 billion. ibid.
The Nobel Prize in Economics. It seemed as if Intellect had triumphed over Intuition. As if rocket science had taken over from risk-taking. Equipped with their magical black box, the partners in LTCM seemed poised to make money far beyond the wildest imaginings of even George Soros. And then in the summer of 1998 when every self-respecting hedge-fund manager should have been playing with his yacht something happened that threatened to blow the lid right off the Nobel Prize winner’s black box: Reality started to misbehave ... On Monday August 17th 1998 a giant asteroid smashed into Planet Finance. ibid.
The only chance of survival was to find a White Knight to rescue them. And the most powerful Knight in town was none other than George Soros. It was the ultimate humiliation: the Quants from Planet Finance begging for a bail-out from the Prophet of Irrational Unquantifiable Reflexivity ... Fear that Long Term’s failure could trigger a general financial meltdown, the New York Federal Reserve hastily brokered a multi-billion-dollar bailout by fourteen Wall Street banks. ibid.
The Ascent of Money has seldom been smooth. Time and again it’s been punctuated by big painful crises. ibid.
American borrowers have come to rely on Chinese savers, a symbiotic relationship between China and America that I call Chimerica. ibid.
So enormous have Chinese savings become in recent years they’ve enabled globalisation to do the most almighty U-turn. Previously, it was the rich English speakers who leant money to the poor Asian periphery. But now it’s the Chinese who are lending money to the Americans. Welcome to the strange new hybrid country of China and America – I call it Chimerica. ibid.
The People’s republic of China has become banker to the United States of America. ibid.
What starts with competition for Olympic medals could end in a battle over dollars if the Chinese decide one day to cut off their credit line to the American empire. Maybe as its name suggests Chimerica is nothing more than a chimera ... The really big crises come just seldom enough to be beyond the living memory of the people who run today’s companies, banks and funds. ibid.
The Ascent of Money has been one of the key factors in human progress, an extraordinary story of innovation, intermediation and integration that has done as much as anything to help people escape from the drudgery of subsistence agriculture. And yet Planet Finance can never quite escape from the gravitational force of Planet Earth. Because the Quants can never take full account of the human factor – our tendency to underestimate the probability of black swans. Our propensity to veer from euphoria to despondency. Our chronic inability to learn from History. ibid.
An investment said to have an 80% chance of success sounds far more attractive than one with a 20% chance of failure. The mind can’t easily recognize that they are the same. Daniel Kahneman
The line separating investment and speculation, which is never bright and clear, becomes blurred still further when most market participants have recently enjoyed triumphs. Nothing sedates rationality like large doses of effortless money. After a heady experience of that kind, normally sensible people drift into behaviour akin to that of Cinderella at the ball. They know that overstaying the festivities – that is, continuing to speculate in companies that have gigantic valuations relative to the cash they are likely to generate in the future – will eventually bring on pumpkins and mice. But they nevertheless hate to miss a single minute of what is one helluva party. Therefore, the giddy participants all plan to leave just seconds before midnight. There’s a problem, though: they are dancing in a room in which the clocks have no hands. Warren Buffett, Berkshire Hathaway, chair’s letter 2000
Two Rules of Investing: Never lose money; never forget rule number one. Warren Buffett, cited Becoming Warren Buffett
Investment is most intelligent when it is most businesslike. Benjamin Graham, The Intelligent Investor, 1973
The world of investing can be a jungle. Bulls. Bears. Danger at every turn. That’s why we are Stratton Oakmont pride ourselves on being the best. The Wolf of Wall Street 2013 starring Leonardo diCaprio & Jonah Hill & Margot Robbie & Matthew McConaughey & Kyle Chandler & Rob Reiner & Jonn Favreau & Jean Dujardin & Joanna Lumley & P J Byrne et al, director Martin Scorsese
They were multi-million-pound property developments, buildings to transform our northern cities. But one by one developments failed. People had invested their life’s savings. Investors have lost millions. Cities left scarred. And overseas’ buyers are now warning against investing in Britain … The story of how a northern dream turned sour. Panorama: Exposed: Northern Dreams, Failed Schemes, BBC 2018
Scandal in the City: we investigate the man who gambled billions and lost. The industry knew Neil Woodford was in trouble but no-one told investors. We also reveal how another money man was doing secret deals on the side. As hundreds of thousands count the cost of the Woodford scandal, we confront the man himself. Panorama: Can You Truth the Billion Pound Investors? Richard Bilton investigates, BBC 2019 TRUST!
That new wave of investors: those taking their own risks on the stock market. ibid.
Neil Woodford’s new fund has been a disaster. It’s lost billions. ibid.
Kent County Council tried and failed to take its money back: £260 million of pension cash. ibid.
More than 300,000 investors have their money trapped. ibid.
Some fund managers seem to be able to do as they please. ibid.
Another fund manager breaking rules designed to protect investors: his name is Mark Denning. He’s worked at one of the biggest investment companies in the world for 36 years: Capital Group manages almost $2 trillion of assets … ibid.
David Cameron and the missing billions. The former prime minister promoted his friends’ controversial investment schemes. We reveal the truth about Lex Greensill’s dodgy deals. How UK taxpayers could lose hundreds of millions. And how David Cameron pocketed a fortune. Panorama: Cameron and the Missing Billions, BBC 2021
This is a story of a former British prime minister and a dodgy scheme that could cost investors billions. ibid.